Royalties and Fees Have Certain Tax Advantages Over ________, Particularly

question 54

Multiple Choice

Royalties and fees have certain tax advantages over ________, particularly when the corporate tax rate is higher in the host country than in the parent's home country.

• A) transaction costs
• B) deferrals
• C) dividends
• D) transfer fees

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Definitions:

Advanced Value

The increase in worth or value of an asset or product due to improvements or enhancements made over time.

Performance Bond

A surety bond issued by an insurance company to guarantee satisfactory completion of a project by a contractor.

Judicial Bond

A type of surety bond required by courts to ensure the fulfillment of a legal action or compensation for possible losses.

Contract

A formal agreement that binds two or more parties together under legal accountability.